The e hustle 53: Every January we break records. Here's why.

Call me Nostradamus.

Every January we break records. Here’s why.

I made a reel last year predicting that in January we would get slammed with new client applications. And we did. Our new clients were up 443% in January compared to December. 

You see, the warning signs are clear. I speak to ecommerce brand owners all year, and it’s scary how many of them are hyping up Cyber Week and the last 3. months of the calendar year in general, as the saviour of their business.

Here’s the drill:

1. I spend too much money to obtain sales. Because I like the sales. They feel good.
2. I think I have to spend so much money to get said sales, because I need to cover my operating costs. 
3. I have a shitload of inventory I need to clear.
4. I was told that you can make squillions in November and December. 
5. I have debt on terrible terms, which I’ve used to survive points 1, 2 and 3.
6. My business model only works at scale.

Fuck that.

I could see it coming. I know that strategy won’t work. So we sit back, and get prepared for the incoming DMs from brand owners saying “something you said resonated”.

Of course it did. I was you. My clients were you. I see you every week in my groups.

I probably know your business better than you do, and I haven’t even met you.

This is the year you need to break out of that cycle. In plain terms, your business must work in January and February without you needing to discount. If it doesn’t, you’re at risk.

Do you know what happens to unprofitable businesses? Even those that are profitable in November and December? They eventually run out of money. 

Trust me. Holding on for hope, will not work.

Instead of focusing on undervaluing your product and brand by discounting it, try this:

1. Work out a sustainable amount to spend to acquire a customer. If you do that, and your sales drop dramatically, your product, or value proposition, or method of communicating is not actually strong enough, and paid media is masking that.
2. Lower your operating expenses to a sustainable level. Yes, it may mean you even decrease your sales - but you need to change your mindset to be about profit, not sales.
3. Learn how to buy inventory correctly. There’s a formula, and it's a thin margin between perfect and disastrous.
4. Learn that you can make squillions in November and December, but you shouldn’t need to.
5. Get out of debt this year by building a business that generates enough working capital to grow, pay you, and surplus funds to pay off debt.
6. Rebuild your business model. Now.

Don’t be here reading this email in 12 months, still in the same position. Let’s build great brands, and even better businesses.

Need help? Book a time to talk here, or reply to this email.

Until next week,

Paul

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